Regulations that hurt business (thesis idea for my wife's research paper)?

My wife is writing a paper on how regulations hurt U.S. businesses when competing with their oversease counterparts. The instructor wants her to be more specific, so what would be a good aspect of harmful regulations on which to focus? Think in terms of environmental regulations, labor laws, etc. What should she focus on while at the same time using sources that aren't overtly libertarian? He specifically warned her to be wary of conservative/libertarian articles with an agenda, and prefers "apolitical," peer-reviewed (i.e. liberal) sources.

I figured that the gold fanatics here would be able to enthusiastically provide some advice.

"I shall bring justice to Westeros. Every man shall reap what he has sown, from the highest lord to the lowest gutter rat. They have made my kingdom bleed, and I do not forget that."
-Stannis Baratheon

Originally Posted by otherone

The reason we have an evil, immoral empire is that it is populated by evil, immoral peons. The State isn't a faceless monster...it is composed of all our petty, ignorant, self-righteous and self-absorbed neighbors.

Sounds like her professor is guilty of confirmation bias and/or purposely making it difficult as to limit any sort of outside school of thought.

Cuz those liberal peer reviewed sources don't have an agenda...

To be fair, he could be a libertarian for all I know and just doesn't want her to use political sources.

"I shall bring justice to Westeros. Every man shall reap what he has sown, from the highest lord to the lowest gutter rat. They have made my kingdom bleed, and I do not forget that."
-Stannis Baratheon

Originally Posted by otherone

The reason we have an evil, immoral empire is that it is populated by evil, immoral peons. The State isn't a faceless monster...it is composed of all our petty, ignorant, self-righteous and self-absorbed neighbors.

It may be of use to point out the sheer VOLUME of regulation as well. Dodd-Frank comes to mind. That monstrocity is so huge that it makes it nearly impossible for small to medium businesses to incur the legal costs just to read and understand the compliance laws. Only the big boys can pay so many lawyers. Those same big boys keep getting tax funded bailouts too...

These costs are untenable for most business...JUST TO READ THE DAMN THING AND COMPREHEND IT. Let alone implement it.

The problem with doing a paper on something like Dodd-Frank is that, in order to write a paper on it, she would have to read it herself. What fun is that?

Minimum wage laws increasing labor costs and pricing the lowest skilled labor out of the market, which can prevent them from learning on the job and gaining skills to advance, which could eventually lead to a skilled labor shortage. Probably can't make the case vs. western Europe, though.

Or the subsidizing of one industry causing harm to another, such as import restrictions on steel making auto companies less competitive.

My wife is writing a paper on how regulations hurt U.S. businesses when competing with their oversease counterparts. The instructor wants her to be more specific, so what would be a good aspect of harmful regulations on which to focus? Think in terms of environmental regulations, labor laws, etc. What should she focus on while at the same time using sources that aren't overtly libertarian? He specifically warned her to be wary of conservative/libertarian articles with an agenda, and prefers "apolitical," peer-reviewed (i.e. liberal) sources.

I figured that the gold fanatics here would be able to enthusiastically provide some advice.

Sarbanes-Oxley might be a good one, which was passed after the Enron scandal and increased auditing standards.

Here's a good article from WSJ that cites a couple of valid sources to help make the case:

But those fees are just the tip of the iceberg of costs imposed by PCAOB. The board is charged with making sure that Sarbox's Section 404 rules on "internal controls" over bookkeeping are implemented. These rules are so onerous that companies have had to undertake exhaustive investigations of such minor issues as how many people should be required to authorize small customer refunds at a retail location.

In 2003 the SEC estimated that the average company could do much of its internal controls work for $91,000 per year. In 2007, the commission acknowledged costs had gotten out of hand, particularly for smaller companies, and told the PCAOB to make the internal controls audits more cost-effective.

In 2008, the SEC's Office of Economic Analysis launched a survey of public companies to judge the results, and it recently posted the findings on the SEC Web site, after collecting data from thousands of corporations.

Section 404 is still consuming more than $2.3 million each year in direct compliance costs at the average company. The SEC's survey shows the long-term burden on small companies is more than seven times that imposed on large firms relative to their assets. Are the internal controls audits helpful? Among companies of all sizes, only 19% say that the benefits of Section 404 outweigh the costs. More respondents say that it has reduced the efficiency of their operations than say it has improved them. More say that Section 404 has negatively affected the timeliness of their financial reporting than say it has enhanced it.

In the years since its passage, the country has experienced an historic drought of initial public offerings. Is Sarbox to blame? Many financial pundits say no, but the SEC survey results point in the other direction. When public companies are asked whether Section 404 has motivated them to consider going private, a full 70% of smaller firms say yes, and 44% of all public companies also say yes.

Has Sarbox driven businesses out of the country? Among foreign companies, a majority in the survey say that Section 404 has motivated them to consider de-listing from U.S. exchanges, and a staggering 77% of smaller foreign firms say that the law has motivated them to consider abandoning their American listings.

...

In fact, consumers have already participated in a much more robust and meaningful survey. University of Minnesota economist Ivy Zhang has tracked stock trading during the consideration of Sarbox in 2002 and then during periods when the SEC has considered exempting small companies from the most onerous audits. Comparing U.S.-listed companies to foreign companies free from Sarbox, she finds an increased likelihood of heavier Sarbox regulation is followed immediately by "negative abnormal returns" for U.S. stocks. On the other hand, news of potential relief from the law pushes up American stock prices.

...

More troubling, a new paper in the Journal of Accounting and Economics finds that since the passage of Sarbox, U.S. firms reduced their investments in capital expenditures and research and development compared to firms in the U.K. and Canada. Authors Leonce Bargeron, Kenneth Lehn and Chad Zutter of the University of Pittsburgh count the ways the law discourages innovation: "First, by increasing the role of independent directors in corporate governance and expanding/criminalizing their liability for corporate misdeeds, [Sarbox] discourages directors from approving risky investments that are costly to monitor." The same goes for senior managers.

I would also say all of them but since I know you are looking for specific regulations I shall give you one. This is a state regulation as opposed to federal regulation but you get the point. I am an auctioneer/appraiser and my state has imposed a regulation that is ridiculous. In order to conduct an auction on behalf of the state (selling police seizure items, surplus or damaged equipment, etc) you must have a minority auctioneer on staff. I am not sure what you know about the auction business but finding a minority auctioneer is akin to finding an ice machine in hell. To remedy the problem, several auction companies have turned to hiring an enterprising black woman in Baltimore who, in exchange for an ungodly sum, will come and sit at your auction and talk on her cell phone. She has no formal training, no background knowledge on auction marketing, no knowledge of the most common items sold at auction and does NOTHING for the entire evening. Since she easily makes six figures a year for this, no small time auction company can afford to even bid on these contracts.

For what it is worth, this is an example that has not hurt me personally as I have absolutely no desire to involve my business with ANY level of government.

Last edited by jdmyprez_deo_vindice; 12-11-2012 at 01:50 PM.

"Governor, if I had foreseen the use those people
designed to make of their victory,
there would have been no surrender at
Appomattox Courthouse; no sir, not by me.
Had I foreseen these results of subjugation,
I would have preferred to die at Appomattox
with my brave men, my sword in my right hand." - Robert E. Lee to Governor Fletcher S. Stockdale (D-Texas), 1870

These costs are untenable for most business...JUST TO READ THE DAMN THING AND COMPREHEND IT. Let alone implement it.

That's the focus in a nutshell--the fact that regulations are unfunded mandates that increase costs, and behave in many cases as REVERSE TARIFFS. As such, they often waste resources, while giving de facto economic advantages to foreign competitors who are not subject to the same regulations.

I should add that I know the Federal Government auctions off piles of junk each year and I am pretty sure they have the same requirements.

"Governor, if I had foreseen the use those people
designed to make of their victory,
there would have been no surrender at
Appomattox Courthouse; no sir, not by me.
Had I foreseen these results of subjugation,
I would have preferred to die at Appomattox
with my brave men, my sword in my right hand." - Robert E. Lee to Governor Fletcher S. Stockdale (D-Texas), 1870

My wife is writing a paper on how regulations hurt U.S. businesses when competing with their oversease counterparts. The instructor wants her to be more specific, so what would be a good aspect of harmful regulations on which to focus? Think in terms of environmental regulations, labor laws, etc. What should she focus on while at the same time using sources that aren't overtly libertarian? He specifically warned her to be wary of conservative/libertarian articles with an agenda, and prefers "apolitical," peer-reviewed (i.e. liberal) sources.

I figured that the gold fanatics here would be able to enthusiastically provide some advice.

I wouldn't focus on specifics whether he likes it or not. The issues isn't really good or bad regulations usually, its the sheer volume of regulations that people can't keep up with even. So even if all our regulations were good, they would still be harmful.

And of course tell the instructor he is missing the point on regulations. At least that's what I would do.

I good way touch upon the regulation, especially if the professor might be a liberal, issue is through lobbying, all that corporate money what exactly are they trying to do and why. There is also that New York Times article just posted in the economics section.

There was this company called Spartan Light Metal Products which made magnesium car parts because they're lighter and make for more efficient vehicles. Huge growth story, tons of value-add, they were kicking ass.

Then some troll company that mines magnesium got mad and demanded that the United States use anti-dumping laws to stop the flow of magnesium into the country. The imported magnesium was turned into car parts by Spartan and then sold all around the world. Could have been a huge industry, but we traded it to save one little mine that was simply not competitive. Now we just import those car parts and they're made in other countries because the cost of American magnesium is too darn high.

Cato, Mercatus Center, and the IHS do some good research in this area as well as the American Enterprise Institute, the Heartland guys, and Competitive Enterprise Institute. For a local level, look up the State Policy Network.

If she's looking for academic research, those are the best places to start. Mises has some good stuff too, but prolly more economic and theory heavy.

__________________________________________________ ________________"A politician will do almost anything to keep their job, even become a patriot" - Hearst

If the professor is a lefty,a safe bet,your wife could choose an example using rent-seeking large corporations and their lobbyists getting laws and regulations passed to harm smaller competitors and grab a larger market share.
Plenty regulations are just that and that might appeal to his anti-big business bias.

If she is clever,she could work in how most regulations hurt all business and all consumers and point out the explosion of regulations and regulatory bodies in recent decades and still come away with a passing grade.

Well if you give specific example on some regulations in US that are bad I can tell you how it is done in Croatia, BIH and in EU (ERU only in general). Then you can give that to your wife and have her eternla gratitude. Happy time.Great success.

What are the biggest offenders in terms of expensive regulations? MAPI, again:

The Environmental Protection Agency (EPA) imposes the largest number of regulations on the manufacturing sector with respect to number of regulations (972 regulations in total, including 122 major regulations), followed by the Departments of Transportation (880 regulations in total, including 69 major regulations), Labor (214 regulations in total, including 27 major regulations), and Energy (106 regulations in total, including 17 major regulations).

The EPA also imposes the largest regulatory burden on the manufacturing sector with respect to cost of major regulations ($117 billion in constant 2010 dollars), followed by the Departments of Transportation ($25 billion in constant 2010 dollars), Health and Human Services ($10 billion in constant 2010 dollars), and Homeland Security ($7 billion in constant 2010 dollars).

[...]
China isn't stealing jobs and industries from the U.S.; American politicians are pushing them out the door.

"The State, both in its genesis and by its primary intention, is purely anti-social. It is not based on the idea of natural rights, but on the idea that the individual has no rights except those that the State may provisionally grant him. It has always made justice costly and difficult of access, and has invariably held itself above justice and common morality whenever it could advantage itself by so doing."
--Albert Jay Nock

When the Federal government set out to address the problem of environmental pollution (a problem that should have and could have been addressed by properly establishing property rights in air, water, etc.) it COULD have simply made it illegal to allow toxic subtances to migrate onto someone else's property. It would have required a few lines of statute and no regulations. Instead, they erected a permitting system whereby prior government permission is required to engage in almost any industrial activity, and a mind-boggling scheme of controls on activities are forced onto people as part of the permitting programs. This is true of the Clean Water Act, the Clean Air Act, RCRA, and others. As a result, huge, permanent government bureaucracies were created and vast numbers of regulations have poured out upon the land. The cost has been staggering.

The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

The problem with doing a paper on something like Dodd-Frank is that, in order to write a paper on it, she would have to read it herself. What fun is that?

Minimum wage laws increasing labor costs and pricing the lowest skilled labor out of the market, which can prevent them from learning on the job and gaining skills to advance, which could eventually lead to a skilled labor shortage. Probably can't make the case vs. western Europe, though.

Or the subsidizing of one industry causing harm to another, such as import restrictions on steel making auto companies less competitive.

Friggin' everything. I'm not any smarter than my employees and I'm sure as hell not better at fixing cars. I just have a lot more patience dealing with sales tax, tire tax, insurances by mandates, license fees, payroll tax, personal income taxes on my S-Corp, health insurance. Regulations enforce that regular people can never open a business, only masochists can. If I could do it all over again, I wouldn't do it. It's not worth it.

I *think* the paper needs to involve international business, so it would have to be framed in order to show how certain regulations imposed on U.S. businesses hurts their competitiveness in the global market. I think the EPA regulations would be a good one.

"I shall bring justice to Westeros. Every man shall reap what he has sown, from the highest lord to the lowest gutter rat. They have made my kingdom bleed, and I do not forget that."
-Stannis Baratheon

Originally Posted by otherone

The reason we have an evil, immoral empire is that it is populated by evil, immoral peons. The State isn't a faceless monster...it is composed of all our petty, ignorant, self-righteous and self-absorbed neighbors.

That story would be perfect, especially if you really research everything about it. Heck, even contact the company and ask if someone would look at some questions for the project.

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